NATIONAL INSURANCE CO. LTD.versusBALKAR RAM & ORS.

                         [2013] 8 S.C.R. 74


A               NATIONAL INSURANCE CO. LTD.
                                 V.
                       BALKAR RAM & ORS.
                  (Civil Appeal No. 2159 of 2007)

                           JULY 9, 2013
B
      [GYAN SUDHA MISRA AND KURIAN JOSEPH, JJ.]

       Motor Vehicles Act, 1988 - Motor a.ccident - Claim for
  compensation - Liability of Insurance Company - Motor
C Accident Tribunal held Insurance company as well as the
  owner of the insured vehicle jointly and severely liable -
  Appeal dismissed by High Court - Plea of Insurance
  company that the policy holder was not holding valid policy
  because his cheque towards premium was dishonoured prior
D to the date of accident and hence insurance company not
  liable - Held: Though the cheque was dishonoured prior to
  the date of accident, intimation thereof was given to the holder
  after the accident - Therefore Insurance company was liable
  to pay the compensation.
E
        United India Insurance Co. Ltd. vs. Laxmamma and Ors.
    (2012) 5 sec 234: 2012 (5) SCR 261 - relied on.
                         Case Law Reference:
        2012 (5) SCR 261          relied on            Para 4
F
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2159 of 2007.

      From the Judgment and Order dated 28.09.2004 of the
G High Court of Punjab & Haryana at Chandigarh in F.A.O. No.
  2941 of 2004.

          Kiran Suri, Nakibur Rahman Barbhuiya, Ritika Gambhir,
    Kirti Renu Mishra for the Appellant.

H                                74
NATIONAL INSURANCE CO. LTD. v. BALKAR RAM &                    75
                   ORS.

    Ashok Mathur, Varinder Kumar Sharma for the                      A
Respondets.

    The following Order of the Court was delivered
                             ORDER
                                                                     B
     1. This appeal has been preferred by way of special leave
against the judgment and order passed by the High Court of
Punjab and Haryana in F.A.O. No. 2941 of 2004 dated
28.09.2004 wherein the appeal filed by the Appellant-insurance
company was dismissed holding therein that the intimation by         c
the Appellant-Insurance Company regarding dishonour of the
cheque towards the issuance of policy was communicated to
the policy-holder after the accident. Hence, it was liable to pay
the compensation to the claimants/ Respondents and it could
not recover the same from the owner.                                 D

     2. To clarify the position, it may be stated that the vehicle
which was insured with the appellant met with an accident and
a compensation of Rs.1,24,035/- was ordered to be paid to the
respondents-claimants along with interest and the owner as
also the insurance company were jointly and severally held liable    E
by the Motor Accidents Claims Tribunal ('Tribunal' for short)to
pay the amount of compensation to the claimants.

     3. The Appellant/Insurance Company assailed the award
passed by the Tribunal essentially on the ground that the cover      F
note for the policy of insurance was issued on 7.04.2000 for
which a cheque was submitted by the owner. However, the
cheque was dishonoured by the bank on 17.04.2000.
Subsequently, the vehicle which was insured with lhe appellant-
insurance company met with an accident on 19.04.2000. The            G
appellant-insurance company, therefore, contended that as the
policy of insurance could not be held to be a valid document in
view of the fact that the cheque towards the policy had been
dishonoured even before the accident had taken place, the
insurance company was not liable to indemnify the claimants
                                                                     H
    76       SUPREME COURT REPORTS                [2013] 8 S.C.R.


A   by paying the amount which fell into its share as per the
    Tribunal's award and it is the owner which is liable to pay the
    entire amount of compensation to the respondents/ claimants.

        4. However, we compliment Ms. Kiran Suri, learned
8 counsel for the appellant for cutting short the controversy by
  fairly pointing out the ratio of the judgment (2012) 5 sec 234
  titled United India Insurance Co. Ltd. Vs. Laxmamma & Ors.
  wherein it has been held that the insurance company is liable
  to satisfy the award if the intimation regarding the dishonour of
C the cheque and cancellation of policy is communicated to the
  policy-holder after the date of the accident. Thus, the defence
  of the insurance company that the policy of insurance was not
  valid since the cheque had been dishonoured prior to the
  accident would not exonerate them from making the payment
  of compensation. In this matter, admittedly the accident had
0 taken place on 19.04.2000 and the cheque although had been
  dishonoured prior to the accident on 17 .04.2000, the intimation
  to the policy-holder had been given by the insurance company
  on 26.04.2000, in view of which the insurance company cannot
  be allowed to contend that the policy-holder was not holding a
E valid policy of insurance in regard to the vehicle which met with
  an accident. Admittedly, the policy-holder had already issued
  another cheque substituting the cheque which had earlier been
  dishonoured.

        5. In that view of the matter and following the ratio of the
    judgment referred to hereinbefore, this appeal has no substance
    and accordingly it is dismissed. No order as to costs.

    K.K.T.                                     Appeal dismissed.